Concurrent airline fleet allocation and aircraft design with profit modeling for multiple airlines

A System of Systems (SoS) approach is particularly beneficial in analyzing complex large scale systems comprised of numerous independent systems – each capable of independent operations in their own right – that when brought in conjunction offer capabilities and performance beyond the constituents of the individual systems. The variable resource allocation problem is a type of SoS problem, which includes the allocation of yet-to-be-designed systems in addition to existing resources and systems. The methodology presented here expands upon earlier work that demonstrated a decomposition approach that sought to simultaneously design a new aircraft and allocate this new aircraft along with existing aircraft in an effort to meet passenger demand at minimum fleet level operating cost for a single airline. The result of this describes important characteristics of the new aircraft. The ticket price model developed and implemented here enables analysis of the system using profit maximization studies instead of cost minimization. A multiobjective problem formulation has been implemented to determine characteristics of a new aircraft that maximizes the profit of multiple airlines to recognize the fact that aircraft manufacturers sell their aircraft to multiple customers and seldom design aircraft customized to a single airline\u27s operations. The route network characteristics of two simple airlines serve as the example problem for the initial studies. The resulting problem formulation is a mixed-integer nonlinear programming problem, which is typically difficult to solve. A sequential decomposition strategy is applied as a solution methodology by segregating the allocation (integer programming) and aircraft design (non-linear programming) subspaces. After solving a simple problem considering two airlines, the decomposition approach is then applied to two larger airline route networks representing actual airline operations in the year 2005. The decomposition strategy serves as a promising technique for future detailed analyses. Results from the profit maximization studies favor a smaller aircraft in terms of passenger capacity due to its higher yield generation capability on shorter routes while results from the cost minimization studies favor a larger aircraft due to its lower direct operating cost per seat mile